The US multinational client explained today its decision to close its Slovenj Gradec subsidiary, saying that “internal assessments and discussions with key clients have shown that Slovenia is no longer considered a better cost country”.
As a result of the cessation of production of components for car seats and interiors in Slovenia Gradec in the northern region of Koroska, 412 people will lose their jobs by the end of the year and another 18 in May next year when production will stop.
“Local and regional management teams have been constantly trying to find new business opportunities for the Slovenj Gradec site, but without any significant results,” Claudia Steinhoff, STEA communications director at Adient, told STA.
An announcement from Adient reads that “negative future prospects and declining cost competition for Adient in Slovenia Gradec have forced the plant to close”.
The company said it had thoroughly considered all alternative scenarios to maintain operations and employment in Slovenia Gradec but “the analysis has not led to any conclusion other than the closure of the plant”.
Adient, a global leader in automotive manufacturing, says it has drawn up a plan to ensure an organized, compatible phase of production activities by the end of 2021.
Responding to the news, the employees said they did not understand why the owner had made such a decision practically overnight given the good results of the company.
The unions urged the government to take action. “I am disappointed that they decided without any social dialogue,” Jaka Šilak of the ZSSS union told the press, noting that the company’s workforce made up 10-15% of the entire active population in the Mislinja valley and announced efforts to persuade Adient management to remain in the region.
Igor Hovnik of the works council said the company was doing well, adding that the Slovenj Gradec plant was more costly than other subsidiaries, with labor costs supposed to be the main reason for this.
The Ministry of Economy told STA that it would do everything in its power to help employees, adding that it would respond to the invitation for a visit to the company as soon as possible.
Labor Minister Janez Cigler Kralj will visit the company in the near future, the ministry said, pointing to a number of measures designed to help workers who had lost their jobs find another.
Jani Prednik, a SocDems opposition lawmaker from Koroka, said the closure, as well as layoffs or other threats to reduce size in Koroka, would mean a social catastrophe for the region.
The wing of the Koroska Chamber of Commerce and Industry (GZS) said Adient was one of the leading employers in the region. And while there are signs of employment from other manufacturers in Koroska, it is unlikely that all Adient employees will find another job.
The company’s latest annual report shows that the Slovenj Gradec plant posted just over EUR 90 million in revenue in 2019, 10% less than a year ago.
The other Adient production site in Slovenia, in Novo Mesto, produces car seats for Renault and Daimler. Borut Varga, a Novo Mesto operation official, told STA that Adient would not close anything in Novo Mesto.